SEOUL, September 24 (AJP) - Negotiations between Washington and Seoul over a $350 billion investment package remain mired in disagreement, delaying the conclusion of a deal that was expected to ease tariffs and deepen economic ties between the two allies.
In July, the two countries reached a preliminary understanding to lower mutual tariffs from 25 percent to 15 percent, including reductions on automobiles, in exchange for South Korea committing to a massive investment in the United States. But the details of how the funds would be allocated — and who would control them — have proved contentious.
Among the scenarios under discussion are dividing responsibilities, with South Korea leading a $150 billion shipbuilding project while the United States oversees the remainder, or alternatively, allowing Washington to lead the entire package with tariff concessions adjusted accordingly.
Yeo Han-gu, South Korea’s chief trade negotiator, departed for Kuala Lumpur this week to attend the ASEAN Economic Ministers’ Meeting, where he is expected to hold talks with U.S. Trade Representative Jamieson Greer. The agenda includes the stalled investment package and a range of non-tariff barriers.
Experts caution that South Korea should avoid simply mirroring Japan’s recent approach, in which Tokyo pledged $550 billion in cash to Washington, backed by its unlimited currency swap with the Federal Reserve. Instead, they urge Seoul to develop a strategy more closely aligned with its economic realities.
“It’s unrealistic to execute $350 billion quickly,” said Heo Jeong, an economics professor at Sogang University. He recommended phased investments, conditional currency swap agreements, and targeted corporate projects. “Setting annual limits and negotiating conditional swaps with the U.S. could help South Korea maintain control,” he added.
Heo also proposed linking revenue sharing to job creation and supply chains, noting that manufacturing investments typically require one to two years before generating returns. Allocating a portion of the funds — 5 to 10 percent — to research and development in collaboration with American programs, with joint ownership of resulting intellectual property, could further strengthen the partnership, he said.
Kang Gu-sang, who leads the North America–Europe team at the Korea Institute for International Economic Policy, stressed the importance of highlighting Korea’s contributions to American shipbuilding. “Ensuring benefits for Korean companies is essential,” he said.
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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